Insurers needed to make quick and frictionless payouts during claims and at the time of policy maturity to foster greater trust between the insurer and the insured, said M Nagaraju, Secretary, Department of Financial Services, Ministry of Finance.
“While taking the policy, you do not ask any questions… but while redemption comes, they will ask you 100 questions,” said Nagaraju, at the launch of two apps by Life Insurance Corporation of India, one for customers and another for agents.
At the time of onboarding, insurance companies were primarily concerned with collecting premiums, he said, while at the time of redemptions customers are subjected to extensive scrutiny, repeated queries, and procedural hurdles such as multiple KYC requirements. This, he implied, creates a perception of mistrust and undermines the very confidence that institutions like LIC have built over decades.
Drawing a parallel with banking, he said that just as a fixed deposit is automatically credited to a customer’s account upon maturity without unnecessary intervention, insurance payouts too should be far more seamless, prompt, and trust driven.
Staying relevant
He also said that LIC must urgently modernise to stay relevant in a rapidly evolving financial ecosystem. He pointed out that while banks have invested heavily in digital infrastructure over the past two decades, insurance companies have lagged behind.
The MyLIC app for customers launched by the state-owned insurer would help policy holders manage their insurance portfolio right from KYC at onboarding, paying premiums on time, reviving lapsed policies to even availing loans against their policies.
The Super Sales Saathi app for insurance agents would help them in keeping track of their customers and their policies, communicate with them as well as dashboards to monitor their performance.
Later talking to the media, LIC CEO & MD, R Doraiswamy, said as part of the digital push the insurance company was moving from a fragmented system of 113 divisional databases to a unified data lake, which will enable AI and machine learning applications, including predictive underwriting, fraud detection, customer targeting, and renewal nudges.
He also said the exemption of GST on certain individual life and health insurance products has been fully passed on to customers, effectively lowering premiums and improving policy attractiveness and returns.
Shareholder approval
With respect to the record date for the recently announced 1-for-1 bonus issue, the date would be finalised after shareholder approval.
On participation in the initial public offer of National Stock Exchange, he said it was too early to take a call.
Doraiswamy said so far as commissions were concerned, LIC followed a disciplined internal policy and did not believe it had paid excessive commissions.
On risk-based capital and IFRS, he said the outcomes will depend on final regulatory design, but he did not foresee any fundamental stress from these transitions.
With respect to Bima Sugam, the IRDSI-backed digital public infrastructure, the LIC chief said they were watchful, noting that digital platforms may reduce distribution costs but are unlikely to fully replace the need for advisory-driven selling.
Published on April 15, 2026